AMC Theaters' Incredible Shrinking IPO

For the third time in four years, AMC Theaters, the nation's second-biggest cinema chain has filed forms to offer shares to the public. It filed forms on Monday to continue with a $450 million initial public stock offering, a significantly lower amount than when it first filed for a $750 million IPO in December 2006 in an attempt to help private equity "recoup some of their heavy investments in the theater operator," but ultimately withdrew th eoffer in May 2007. In September of that year they tried again, this time filing for a $500 million IPO, only to yank proposal in October of 2008 amidst the housing bubble meltdown.

At the Los Angeles Times, Richard Verrier says it's worth pondering why the company is initiating the IPO now, just when "AMC and other chains in the U.S. and Canada are grappling with a steep decline in theater attendance, which is down 21% so far this year." Verrier blames the private equity money, which looks increasingly desperate to get out of the pictures business with each passing IPO.

Movie theaters are a nice place to visit but, to paraphrase Ernie from Sesame Street, we wouldn't want to invest our money there. Whether the blame goes to Netflix, the general cruminess of most major studio releases, or the ever shrinking theater-to-DVD window, running movie houses has become a tougher business and threatens to become tougher in the years going forward. So, credit AMC with newfound confidence, at least.

Which brings us to yesterday's $450 million filing. The Hollywood Reporter's Georg Szalai doubts the lattest attempt will fare better than the first two, which were undone by "weak market reception and volatile markets." AMC, for its part, "didn't provide latest IPO figures, such as the expected number of shares and their likely price, on Monday." Factor in the "recent stock market slump" and "mixed reception" for film exhibition stocks, and it's unclear when the IPO will even debut.